What municipalization supporters haven’t told you

Friday

Apr 10, 2020 at 3:49 PM

How much do you know about the municipalization issue? You, the constituents, haven’t gotten much information. It’s a very emotional issue and hopefully you won’t vote that way. Here are a few things you may not know.

When Black Hills Energy came to town, it took over Aquila’s franchise and because Xcel would not sell electricity from the Comanche plant, Black Hills built the Airport Generation Station.

Yes, Black Hills got a sizable rate increase, thanks to the Public Utilities Commission. Going forward, Black Hills has no reason to apply for any rate increases because the company has no reason to build any capital projects.

We don’t know if the municipal utility would have to raise rates. Supporters tell us that current rates are enough to pay the debt to buy Black Hills assets, but they don’t know what it will cost after 8 to 10 years of litigation.

At first, the idea was to condemn the distribution system within the city limits of Pueblo at a cost of $334 million. Now the mayor and the Board of Water Works have decided to condemn all of Black Hills assets in Colorado for $980 million. That would include generation, transmission, distribution and general pant facilities, less depreciation. The City Council had no hand in that decision.

Municipalization supporters don’t know what the cost of operation and maintenance and startup of the system will be. The mayor has said that a request for proposal will be issued to determine who will maintain the system, but San Isabel’s general manager, Reg Rudolph, has been at every meeting, sitting with the mayor and Seth Clayton, the water board’s chief executive officer. Rudolph even sat in on a meeting between the City Council and the water board. I wonder who will get the contract and at what cost?

The feasibility study’s 20-year analysis estimated a 14 percent decrease in rates if we take all of Black Hills’ Colorado assets. Is that decrease in year one or year 20? Actually neither.

Both the mayor and Clayton have said that we wouldn’t realize any rate decreases for a few years after municipalization is complete. So it could be eight to 14 years before we get any rate decreases, if at all.

Black Hills is in the process of building a 200-megawatt renewable energy system. It should be solar and it should be in Pueblo.

That system will result in a 5 percent decrease in rates. That brings that 14 percent decrease down to 9 percent.

The city’s annual budget is about $93 million. Would you invest 10 times your annual income on a scheme that wouldn’t pay you anything for three or four years or more?

Now lets talk taxes. Entities in the county that depend on property taxes will lose up to $9 million in tax revenue and the city will lose $8.4 million in sales and use taxes, franchise fees and property taxes.

Supporters say payments in lieu of taxes will be made. Guess where the money will come from? Rates. And it won’t make the city whole.

We can’t afford to lose anything. Not only do we have a structural deficit in our current budget, but the loss of sales taxes due to the coronavirus will be crippling.

Supporters are saying that municipalization will help with economic development. If you want to enhance economic development, then incentivize current and future companies with solar on future and existing buildings.

If you want to lower electric costs for all businesses in Pueblo, consider micro-grids, electric districts and a program I’ve been promoting for the last few years that the Legislature will considering (Community Choice Energy). And we won’t have to spend $980 million.

I sponsored a resolution to make Pueblo 100 percent renewable by 2035. If we accomplish that goal, the revenue the municipal utility will lose will be astronomical.

Colorado State University-Pueblo will be 100 percent renewable in few years, saving the school thousands. And many more businesses and individuals will be putting solar panels on their roofs. Each will save a lot of money and it all will add up to revenue losses for the municipal utility. The cost to maintain the grid will only go up.

None of these things are things the pro-municipalization side want you to know. And they won’t tell you because it’s not about what’s good for Pueblo anymore, it’s about empire building and winning ― winning at any cost.